Gazprom plans to merge power assets with Renova

JacobGronholt-Pedersen

MOSCOW -(MarketWatch)- Russian gas giant OAO Gazprom (GAZP.RS) plans to merge its power unit with privately held IES Holding Ltd., controlled by tycoon Viktor Vekselberg, by the end of the first quarter, the company said late Wednesday.

Under an $8.8 billion deal signed in July last year, Vekselberg's investment vehicle Renova would get no less than 25% plus one share in Gazprom Energoholding, which controls Gazprom's main power assets and would serve as a base for the merged company.

A merger would create Russia's largest power company, which would hold a quarter of the country's power generation capacity and increase the state's control of the sector to 70% from half at present.

Russia's antimonopoly service has said it wouldn't support the deal and that it would be either rejected or the agency would force it to sell some assets.

Gazprom said last month that it had withdrawn an application with the antitrust regulator to merge the assets.

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